Start-up REO "Trash-Out" business

Discussion in 'Starting a Lawn Care Business' started by joefromsac, Jul 2, 2008.

  1. joefromsac

    joefromsac LawnSite Member
    Posts: 3

    I'm looking into starting up a foreclosure "Trash-Out" business with a family member. I've been in real estate for 6 years so I do have some contacts but am pretty much starting from scratch. I'm in one of the hardest hit area's in the nations for foreclosures, Sacramento. I've done rehab work and have the equipment already

    What I have:
    Truck
    Lawnmowers, Chain Saws, Edgers, etc.
    Dump Trailer
    Tree Stumper
    Mulcher
    Tractor
    High power pressure washer
    & lots of energy

    What type of advice would any of you have?
    Do you charge per hour or flat rate?
    What do you charge for mowing the lawns every other week?
    What have you found to be the best way to get new business?
    How many jobs can 2 young guys hammer out in a week?

    I apologize for all the questions but I want to understand what I'm getting into. I do really appreciate any help you guys can be :drinkup:.
     
  2. Kubota130

    Kubota130 LawnSite Member
    Posts: 59

    In the last 12 years we have managed 1000 plus properties: residential, commercial and industrial and on average we manage and maintain 60 to 80 properties at any given time. Remember these are Atlantic Canadian prices as well. Our gas was also $6.22 a gallon this morning so you may need to adjust your prices to fit your area and expenses. Our properties also can be up to 100 miles one way travel.

    Hope this answered some of your questions.

    Kubota
     
  3. MowHouston.com

    MowHouston.com LawnSite Member
    Posts: 7

    And be ready to wait 1-3 months, sometimes longer for your check in the mail.
     
  4. joefromsac

    joefromsac LawnSite Member
    Posts: 3

    Thanks, Kubota. Good info, very helpfull.
     
  5. laxative

    laxative LawnSite Member
    from Ohio
    Posts: 147

    Run away fast. It sucks. It's horrible and disgusting and dangerous. I've done maybe 500 of them, and also average 50-60 at a time.

    Prices are usually set by middleman companies who will try to strong-arm you into doing $30 yards 100 miles away because they bid the work out at a low price to a huge bank to get their business. It's all flat rate and the companies who send you the work will want 20-25% off the top. And they'll be completely annoying too. Be prepared to drive 100 miles to pick up a 3 inch piece of plastic from a garage floor because they threaten to backcharge you to get somebody else to do it.

    Also be prepared to wait a couple months for payment, and keep in mind they usually don't want any quality rehab work done. They want to spend as little as possible. Bigger the bank, the less they'll spend because they have a slew of 'em and just want a low flat rate and don't have time to take bids and screw around. Be prepared for meth houses and hypodermics and overflowing toilets and rotten refrigerators and dead pets. I hate it.

    And you'll need a portable generator, and a respirator, and some other small stuff.
     
  6. RC Works

    RC Works LawnSite Member
    Posts: 1

    I talked with a guy yesterday that was researching our area and looking for contractors to do this. It sounded pretty good at first but what laxative said rings familiar. He wanted to pitch 300 or so properties on someone for $20 each to include a 'perimeter' cut and inspection. In a rural area with big drives between jobs I don't see how you could pay for fuel.

    I'm interested still, and looked over the related posts and HUD payment schedules posted elsewhere but I think I'll try and find jobs on my own rather than being pimped out for peanuts.

    Has anyone had any luck approaching local banks or credit unions to do this or is all the work channeled through the middlemen?

    RCW
     
  7. laxative

    laxative LawnSite Member
    from Ohio
    Posts: 147

    A little. Realtors too. Smaller local banks only have a handfull of foreclosures.

    Today I almost got shot by a sheriff's deputy for breaking in to change the locks on a vacant house. Fun stuff.
     
  8. joefromsac

    joefromsac LawnSite Member
    Posts: 3

    Laxative...that sounds horrible! Why do you continue to do it?
    I was going to market to Realtors instead of the banks, I've heard they actually do get bids but I was thinking a flat rate depending on the sqft and work needing done.
     
  9. RickR1818

    RickR1818 LawnSite Senior Member
    Posts: 342

    DONT DO IT. You'll be bankrupt before you get paid. Money changes hands many times before it gets to you and you will always be the last person paid. Ive even seen the prop managing companies use the money they are supposed to pay their contractors ie you, to purchase more properties.
     
  10. Cutman007

    Cutman007 LawnSite Member
    Posts: 81

    I started doing "trash outs" during the drought in Jan 2007 and it does suck doing them. NASTY! My lawn guys hate it! I'm about to start subbing them out.

    GLTA!
     

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